CFTC Finalizes Position Limits Rule

The Commodity Futures Trading Commission approved three final rules recently, including one regarding positions limits for derivatives. That completed the Commission’s rulemakings related to the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Commission adopted new and amended federal spot-month position limits for derivatives contracts associated with 25 physical commodities and amended single-month and all-months-combined federal limits for most of the agricultural contracts currently subject to federal position limits. Under the final rule, federal non-spot month position limits were not extended to the 16 new physical commodities. Senate Ag Committee Chair Pat Roberts says he appreciates the Commission’s careful review and consideration of stakeholders’ input, particularly from the nation’s agricultural end-users, as they put the final rule in place. “This rule contains a clear definition of what practices constitute a bona fide hedge and therefore are not subject to position limits,” Roberts says. “This is critical to ensure all commercial end-users can effectively hedge commercial risk.” He thanked Commission Chair Talbert for keeping his word to both Roberts and American agriculture in finalizing the rule.